Library workshop helps people get financially fit
BY LAURA PAVIN Contributor January 31, 2012 2:34PM
University of Illinois Extension Consumer and Family Economics Educator Karen Chan discussed with an audience at Ela Public Library how to assess their financial situation using credit scores and easy to use income and expense reports. | Michelle LaVigne~
Article Extras
Updated: March 3, 2012 8:07AM
Net worth statements, income versus expense reports and financial action plans were just a few of the financial planning strategies given to 15 residents attending the Financial Fitness workshop at Ela Area Public Library Monday night.
The workshop, conducted by University of Illinois Extension Educator Karen Chan, a certified Financial Planner and Consumer Economics Educator, was held to educate the public about evaluating and managing personal finances.
“That’s really what Extension is all about — providing unbiased, research-based information to members of the public so they can improve their daily lives,” Chan said.
An educator for the Extension’s College of Agricultural, Consumer and Environmental Sciences, Chan has been providing the most up to date financial information to residents of Lake and McHenry counties since she took the job in 1993.
After showing Monday’s class how to decide which of their finances fell into what category, Chan illustrated that an individual’s net worth is calculated by subtracting total liabilities from total assets.
She explained that liabilities include mortgages, loans, co-signed loans, property taxes owed, credit card debts and all other debts. Assets include cash, liquid assets, funds, investments and business interests.
Those not in a sole-proprietorship or partnership were told not to skip over the “business interests” category of the statement’s assets section too quickly, because they could consider contracts and receivable interest on lent money to be business.
“Maybe you’re like my dad; it didn’t matter that you’re family, because you would still fill out a loan agreement with an interest rate,” Chan joked.
The group was surprised to discover that because credit scores are evaluated by companies in a variety of ways, it is often better to obtain a copy of their credit report as opposed to the much-hyped credit score. Chan recommended www.annualcreditreport.com to get a copy from one or more of the three major credit reporting agencies.
To avoid future problems with insurance agencies, Chan suggests people record a video of all the assets in their house and store a copy of the video offsite as proof of their assets.
Joyce Harless, of Hawthorn Woods, was interested to learn that Payable on Death designations — that is, designations that arrange for a person to receive all the client’s assets upon their death — could be used for multiple financial accounts.
“I wasn’t familiar with the information she presented about beneficiary designations and POD’s, payable upon death,” Harless said. “It reaffirmed the importance of having all your paperwork and document set up properly so that you don’t find yourself out of luck in emergency mode.”
Chris Roberti of Lake Zurich saw the class as a tune-up, since financial and investment information changes often.
“It reaffirmed that a monthly budget is a good reminder to take a look at your net worth before spending,” Roberti said.
Chan advised that people compose a monthly spending plan after comparing monthly income to monthly expenses. She suggested outlining expenses such as mortgage or rent payments, utilities, food at home and outside of the home, transportation costs, medical care, credit payments and insurance.
The next Extension workshop, “Ten Money Rules to Live By,” will be held at 7 p.m. Wednesday at McHenry Public Library, 809 N. Front St., McHenry.
Chan conducts a variety of financial workshops for multiple groups at various locations around both counties, including nonprofit organizations, senior services groups and public libraries. She also conducts workshops at her offices in Grayslake and Woodstock. For more information visit web.extension.illinois.edu/lm.
Comments Click here to view or make a comment